House prices have hit a record high, new data shows, but that may not last long after the Budget.

The price of a typical house hit a new record of £293,999, according to Halifax data.

It revealed that house prices rose 0.2% in October, putting them above the previous peak of £293,507 reached in June 2022, towards the end of the property buying spree at the end of the Covid-19 pandemic.

Year-on-year prices increased by 3.9 percent, down from 4.6 percent in September.

However, policies in the Budget Higher stamp duty for second home buyers and a return to previous thresholds for first-time buyers “could affect demand”, said Amanda Bryden, head of mortgages in Halifax.

Those hoping to buy a new home soon or looking to remortgage will be hoping the Bank of England will cut interest rates further today, which it is hoped will result in lower mortgage rates.

Policymakers cut interest rates from 5.25 percent to 5 percent in August, but kept them steady at their September meeting.

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Analysts expect rates to be cut by the Monetary Policy Committee by a quarter of a percentage point.

“The fact that house prices have reached these highs again in the current economic climate may surprise many, but what is perhaps more remarkable is that they have not fallen very far in first place,” added Ms Bryden.

“Despite the challenges of rising interest rates, house prices have generally stabilized over the past two and a half years, recording an overall increase of 0.2 percent.

“This is a significant slowdown compared to the 21 percent increase we saw in the equivalent period from January 2020 to summer 2022.”

Ms Bryden added that activity in the property market had improved, with the number of new mortgages granted recently hitting a two-year high.

“This is consistent with the steady decline in average mortgage rates since the spring – now more than 160 basis points lower than summer 2023 – coupled with continued positive income growth,” she said.

However, concerns over the impact the budget could have on the property market could dampen future demand.

Jeremy Leaf, estate agent and former chairman of Residential RICS, said: “Concerns over the Budget have created some uncertainty among our buyers and sellers, but many have hit the pause button rather than the stop button.

“The underlying sentiment is that interest rates will remain fairly stable or even fall slightly over the coming months, which has supported confidence and activity.

“Stamp duty increases for second home buyers and landlords have resulted in some renegotiation of previously agreed prices. But any slight decline was offset by new interest from first-time buyers keen to take advantage of the availability of competitively priced properties and changes to their own stamp duty next spring.

In terms of house price growth, Northern Ireland recorded the strongest property growth of any country in the UK, up 10.2% on a year-on-year basis in October, with prices averaging reaching £204,242.

London continues to have the most expensive house prices in the UK, now averaging £543,308, an increase of 3.5% on last year.